The suspension of all trading in the Standard Life Investments UK Real Estate Fund will end “as soon as practicable”, the company has said.

“Exceptional market circumstances” were behind the suspension, officials said.

The decision was taken after an increase in redemption requests as a result of uncertainty for the UK commercial real estate market following the Brexit vote.

Standard Life Investments released a statement, which read: “The suspension will end as soon as practicable, and will be formally reviewed at least every 28 days.”

It stated: “Due to exceptional market circumstances, Standard Life Investments has taken the decision to suspend all trading in the Standard Life Investments UK Real Estate Fund (and its associated Feeder Funds) from noon on 4 July.

“The decision was taken following an increase in redemption requests as a result of uncertainty for the UK commercial real estate market following the EU referendum result. The suspension was requested to protect the interests of all investors in the fund and to avoid compromising investment returns from the range, mix and quality of assets within the portfolio.”

The fund invests in a “diverse mix of prime commercial real estate assets from across the office, retail, industrial and other sectors”.

Approval for the suspension was received from Citibank Europe plc, in its capacity as depositary for the fund.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: ‘Property funds are clearly under pressure as a result of the Brexit vote, and we could now see a new wave of investors being unable to liquidate their property funds quickly, which we last witnessed during the financial crisis.

“This is part of the problem with investing in open-ended property funds, and one of the reasons we don’t recommend them to investors. Property does offer diversification, and a reasonable yield compared to government bonds, but investors must be willing to accept high costs, and a lack of liquidity when the market turns down.

“Closed-ended property funds at least provide investors the chance to sell out during market upheaval, though widespread selling serves to depress share prices and widen discounts in times of stress. Indeed there are currently a number of closed-ended property trusts trading at discount in excess of 10%. However, being closed-ended does at least means the manager does not have to liquidate properties at a time when everyone else is looking to do the same.”

He warned: “Given the outflows the sector seems to be experiencing, this could well put downward pressure on commercial property prices. The risk is this creates a vicious circle, and prompts more investors to dump property, until such time as sentiment stabilises.”